Medical Device Excise Tax – Are You Ready?
Healthcare Reform, enacted March 30, 2010, ushered in several new revenue raising provisions to partially offset the cost of broadening healthcare coverage in the United States. One of these provisions is new Internal Revenue Code (“IRC”) § 4191, which imposes an excise tax on sales of any “taxable medical device” by the manufacturer, producer, or importer of the device, in an amount equal to 2.3 percent of the sales price. Medical device sales will be subject to the tax beginning January 1, 2013. The new law leverages the existing manufacturing excise tax regulations (e.g., for fuel oils, tires and sports fishing equipment). Presently we are awaiting more guidance from the IRS and U.S. Treasury.
In anticipation of the new tax, affected medical device companies may want to undertake readiness activities to enable accurate and timely compliance with the excise tax by January 1, 2013.
Download the PDF attachment to learn more.